Tuesday, October 11, 2011

There are times when you will do a search on the World of Warcraft auction house to gauge your competition and you will see the wonderful notice "No Items Found". Having no other items on the auction house to compete with your items is a wonderful thing. No competition. No undercutters. No wall of glyphs. No stupidly low prices. No crashing market. Nothing. For an unpredictable amount of time, you will have complete control of the entire market pricing for that one item. You never know when the next person will come along to undercut you. You may not have much time to capitalize on this wonderful opportunity, so strike hard and fast.

Buy Low, Sell Normal?

Some bloggers or players will tell you to "Buy Low, Sell Normal". This is never my philosophy. Why would you want to limit yourself to selling at the market value all the time, especially when you have no competition? Having no items found is your opportunity to profit from your own pricing structure. This is your chance to reset the current market value, regardless of whether you are flipping an item, or selling a crafted good. If you choose to sell at a price around the normal market value, then you are doing more harm than you might think.

Pricing In Excess Of Market Value

When there are no items found on the WoW auction house for my chosen item, I like to reset the current market value, or asking price, to a minimum of at least 120%. Depending on the demand on the item, I can raise the price to 200-300% of normal market value and still have the item sell.

Pricing Over Market Value:

Raises the price at which eventual undercutting will begin.

Increases your profit per sale.

Gets you more gold for the same amount of work.

Can lead to an increase in actual market value over time.

Starts to inch the auctioneer scans of other players up over time, which can be used to fool auction scanning programs into a higher perceived value.

May lead competitors to also raise their pricing structure.

Example Markets

Rich Purple Silk Shirts

These are all great benefits that should be considered when choosing to elevate the price or not. The best items to elevate are the items that are in high demand and are constantly being purchased. Better yet, if you have an item that has less competition to begin with, like my Rich Purple Silk Shirts market. I haven't seen a competitor EVER, so I set my prices based on the threshold at which they will still sell at a decent volume. For my server that seems to be 35 gold per shirt.

Solid Sky Sapphires

In a market with competition I can still get away with the price gouging. Eventually over time some markets learn the new pricing system that I am helping to create by posting higher priced items. A good example from my WoW gold making is the Solid Sky Sapphire. The market value according to the auctioneer tooltip shows the Solid Sky Sapphire priced at 35 gold. Some days I have competition and they sell from between 25 to 40 gold for each Solid Sky Sapphire. On days with no competition, I keep the price constant at 75 gold per gem, as you can see in the Undermine Journal image below. They still sell because of their high demand. If I chose to sell at the normal market value, I would be pissing away extra gold that could have been made.

Solid Sky Sapphire Jewelcrafting Sales
(Click to Enlarge)

Parting Thoughts

So don't sell yourself short. Learn and understand your market and the items that you craft within that market. Don't settle for just "Selling Normal". When you get the wonderful "No Items Found" notice, experiment with how high you can jack the price up and still get away with making sales. Maybe others will follow suit and you will all have to work easier for the same gold. Remember in a market with heavy undercutting like Mysterious Fortune Cards or Glyphs, if there are no other items posted on the auction house, the price that you decide to set the new market price to is also the same value that undercutting will begin. With smart competitors, you will see them undercut just below your new higher prices. In theory, if the beginning of the chain starts at a higher price, then the end of the chain will end at a higher price.

1 comment:

Market value represents what an item will typically sell for. Market value does change with supply and demand. The fact that there is no supply but yours will mean you are able to charge a higher price than when there is lots of supply. You are still selling at market.....just the market has changed based upon the supply.